With the American Express Cobalt Card launching this week, I figured it was time to do a little reassessment of the current state of affairs. After all it's been quite a while since I wrote my initial primer on credit cards, and lots of dramatic changes have taken place since then. Just to name a few:

First of all, what do I make of these changes? I think they make sense on the whole, and there's a decent mix of positive and negative news.

It's reasonable for Amex to withdraw the first-year-free offer on the Gold Rewards Card given that they're trying to consolidate a position for their new Cobalt Card. I expect that we will see the fee waiver come back in the future from time to time, as a promotional offer rather than a cornerstone of the card as it's always been in the past.

Meanwhile, while the lower referral offer of 5,000 Starpoints on the SPG cards is a real shame, I always thought 10,000 Starpoints for referring a card was a little on the generous side to begin with.

As It Stands

The below is a quick summary of the best American Express cards on the market, taking into account all the recent developments:

So where does that leave us? Let's look at the best strategy going forwards from two perspectives: racking up the points by chasing signup bonuses, and maximizing your return on daily spending.

Racking Up the Points

It's an oft-repeated mantra by this point on Prince of Travel that signup bonuses are the key to broadening your travel possibilities. It used to be the case that the Gold Rewards Card was considered the "best" introductory card, but with the loss of the first year fee waiver, as well as the fact that referrals (both TO and FROM the card) have been suppressed, this is clearly no longer the case.

With the Gold Rewards Card taking a backseat for the time being, it's quite clear to me that the American Express Business Gold Card emerges as the most compelling "starter" card to get. It offers 40,000 Membership Rewards points after spending $5,000 in the first three months, and most importantly it retains a first-year-free offer.

If you are playing the game at a more advanced level and are comfortable with paying annual fees when they're worthwhile, I would definitely recommend getting the American Express Business Platinum Card and leveraging its generous referral bonus of 25,000 Membership Rewards points per referral to cycle through the Business Gold, Business Platinum, and Platinum cards.

Where does the Cobalt Card come in? Well, we know that points earned on the Cobalt Card will be in the Membership Rewards Select Tier, meaning that you can only transfer points to hotels, not airlines. So I'm going to exclude the Cobalt from the usual pool of MR-earning cards, and instead analyze it alongside the SPG Card and Business SPG Card, since the most advantageous thing to do with your Cobalt points is to transfer them to SPG at a 2:1 ratio.

The first thing to notice is that purely in terms of the signup bonus, the 40,000 MR points you earn over twelve months on the Cobalt Card (remember, you earn 2,500 MR points per month after spending $500 on the card, plus a 10,000 MR signup bonus after spending $3,000 in the first three months) can be turned into 20,000 Starpoints, which is the same as the usual, non-promotional offer on the SPG cards.

Meanwhile, while the Cobalt Card follows a monthly subscription model, the total fees add up to $120 over a whole year. This is the same as that of the SPG Card as well. Once you take into account the $50 cashback from Great Canadian Rebates, this makes the Cobalt Card a very competitive way to earn SPG points.

Since Starpoints are traditionally quite difficult to earn while also being one of the most high-value currencies around, having the Cobalt Card as another option to rack up Starpoints alongside your SPG cards is great news for Canadian points collectors. And that's especially true once you look at the Cobalt Card's category bonuses...

Everyday Spending

While I usually champion the notion that the points earned from your regular spending are far outweighed by those earned via signup bonuses, the Cobalt Card's 5x category bonus shakes things up a little.

Specifically, the Cobalt Card offers 5 Membership Rewards points per dollar spent at grocery stores, restaurants, bars, coffee shops, and food delivery services. If you elect to transfer these points to SPG, that equates to 2.5 Starpoints per dollar spent at these establishments, a rate of return that dwarfs the 1 Starpoints per dollar you would otherwise earn with the SPG Card or the Business SPG Card.

Also, remember that even though you can't transfer Cobalt MR points to airlines directly, you can transfer to SPG and then transfer to airlines. This would typically done at a 2:1 ratio from Cobalt to SPG, then a 1:1.25 ratio from SPG to your selected airline, since the program offers you a 5,000-point bonus whenever you transfer points in chunks of 20,000 Starpoints.

This means that when spending money at grocery stores, restaurants, etc., using the Cobalt Card is far and away the best option. Even if you only wanted to earn Aeroplan miles or British Airways Avios (which you can't directly transfer to), you'd be earning 3.125 points per dollar spent on the Cobalt (5 MR → 2.5 SPG → 3.125 Aeroplan or Avios), compared to any other American Express card on which you'd earn at most 2 points per dollar spent.

It gets even better if your spending habits are such that you spend at least $500 a month in these categories specifically. Then, you'd earn the monthly bonus of $2,500 MR points, plus the wealth of bonus points from the 5x multiplier. The Cobalt Card together with groceries and dining is truly a winning combination, as I'm sure American Express intended it to be.

For the first two categories, I'd actually venture to say that the Gold Rewards Card remains the best option – in fact, it's one of the few areas in which the Gold actually remains competitive. That's because unlike the Cobalt, the MR points earned on the Gold card can be transferred to Aeroplan and Avios at a 1:1 ratio.

On the other hand, for the "transit" category – which covers everything from reloadable transit passes to taxi fares to Uber rides – the Cobalt Card is so far the only card that gives you bonus points! It's always refreshing to see new category bonuses, so I'd highly recommend using the Cobalt whenever you're trying to get around.

Lastly, when it comes to all other purchases, I stand by the fact that the American Express SPG Card or Business SPG Card remains the most valuable points to earn on non-bonused spending. The earn rate of 1 Starpoint per dollar spent is usually on par with the other cards, and in many instances a better value proposition due to the versatility of the SPG program as a whole. I don't expect this assessment to change until the SPG program itself changes!

Conclusion

There's been major shakeups in the world of American Express credit cards as of late, chief among them being the introduction of the American Express Cobalt Card. The signup bonus on the Cobalt is quite competitive, with the only major drawback being that it's distributed over 12 months rather than all at once. However, that's not the most impressive aspect of the card – instead, it's the incredible return on groceries and dining purchases that makes the Cobalt Card hugely attractive for anyone who has to eat!

About Ricky
Ricky’s love for travelling and learning more about the world is unbounded. He’s on a mission to document and understand every square inch of the globe, and travelling on points will be an essential tool along his journey.